1 NATO, the KOSOVO WAR, and NEOLIBERAL THEORY by Sean

NATO, THE KOSOVO WAR, AND NEOLIBERAL THEORY By Sean Kay1 Introduction and Overview Throughout the 1990s, neoliberal institututional theory dominated much of the academic literature and was reflected in policy assumptions of decision-makers working on European security. Scholars looked to the “alphabet soup” of international institutions and their principles, norms, rules and decision-making procedures including the United Nations, the Organization for Security and Cooperation and Europe, the Council of Europe, the European Union, and the North Atlantic Treaty Organization (NATO). Meanwhile, policymakers invested considerable time and resources into using international institutions for managing risk and reducing fear in contemporary security relationships. It seemed that, in the European case, institutions mattered. However, the central question of how security institutions mattered in terms of security provision was left unanswered until the Kosovo conflict of 1999. In the case of warfighting, NATO did matter. However, contrary to neoliberal expections, NATO’s institutional attributes raised the transaction costs of security provision. As an international institution, NATO’s involvement in security provision was a liability, not an asset. NATO and its extensive post-Cold War adaptation has been a primary case study for applying neoliberal theory to security institutions. By the late 1990s, NATO had been transformed by its members away from its core alliance functions. NATO served as a tool for organizing collective diplomacy toward the post-communist countries of Eastern Europe and its institutional functions were adapted so non-members could engage in its 1 Sean Kay is an associate professor of politics and government at Ohio Wesleyan University and a non- resident fellow at the Eisenhower Institute in Washington, D.C. 1 cooperative mechanisms. New institutional structures including a North Atlantic Cooperation Council, Euro-Atlantic Partnership Council, Partnership for Peace, and membership enlargement were evidence that NATO was adaptable to a new security environment. This article tests assumptions about NATO’s post-Cold War institutional development and security provision via a case study of the Kosovo war. Through this study, the article seeks to shed light on the conditions under which international institutions are more or less likely to contribute to security provision. The Kosovo war is a crucial test case for neoliberal theory for six reasons. First, the objectives of the war reflect a new value-laden institutional mission manifested in NATO’s principles and norms. The long track record of inhumanity promulgated by Slobodan Milosevic was the core reason the international community sought to intervene in Kosovo. However, when states went to war, the decision on timing was primarily a taken to make credible NATO’s new missions. Second, after ten years of signaling and warning among states and non-state actors about the risk of regional instability spreading from a conflict in Kosovo, this should have been an easy project for NATO to handle - especially since the Kosovo war was its second major foray into the Balkans. Third, NATO’s core function of information sharing via multilateral planning had allowed its members a decade to prepare for exactly the kind of crises presented by Kosovo. Fourth, neoliberal assumptions about NATO would predict that the institution can lower the transaction costs of security cooperation. However, as this article demonstrates, the decision to fight a war through NATO’s rules and procedures actually increased the transaction costs of security provision. As the war progressed, states found that the best way to lower transaction costs of security outcomes was to skirt NATO’s rules and 2 procedures. Fifth, since the Kosovo war, NATO’s key member, the United States, has moved away from NATO and there is a collective perception among the member states that the key lesson was to never do something like this again. Sixth, a new debate over the role and efficacy of institutions is likely to emerge following the collapse of United Nations agreement on Iraq policy and the subsequent American-led invasion of Iraq. The Iraq war illustrated structural trends in American foreign policy which have roots in the Kosovo experience. Understanding both the explanatory nature of neoliberalism as a cause of NATO’s war on Serbia and the costs of waging war through an international institution are important both understanding both the theory and practice of international relations. This article surveys neoliberal assumptions about international institutions and security and assesses these assumptions within the context of the major scholarly literature on NATO in the 1990s. A framework for analysis is provided for testing independent and dependent variables as they are applicable to understanding the role and function of NATO as an international institution. Two core neoliberal assumptions about institutionalized multilateral cooperation are then examined in the context of contemporary liberal theory: 1) principles, norms and the timing and cause of the Kosovo war; and 2) the relationship between information sharing, institutional rules, procedures, and transaction costs. The central conclusion is that NATO’s involvement in Kosovo is best understood as a spectrum in which the rationale for the war, and the reason the war started when it did, are best explained by neoliberal theory. However, in terms of the hard test of security provision, NATO’s institutional attributes decreased the efficiency of security outcomes. Because, as this study shows, the presence of NATO in 3 warfighting actually increased the transaction costs of security provision, the institution has become increasingly irrelevant since the Kosovo war. NATO has been adapted and survived – but it is a hollow institution that is politically unmanageable, militarily dysfunctional, and strategically challenged. The theoretical and policy irony is that the decision to go to war through NATO confirms some core assumptions of neoliberal institutionalism – but it also diminished the institutional relevance of NATO. Consequently, the emphasis that neoliberal theory put on NATO in the 1990s as a key case study illustrating the value of the theory appears circumspect. Neoliberalism and International Security Neoliberal theory posits that “institutions matter”. This is not a view that is rejected by critics of institutional theory – primarily contemporary realists. The core issue of contention is really over how they matter and whether institutions should be treated as independent variables, dependent variables – or both? Traditionally, neoliberal scholarship focused on the study of international regimes and the norms, principles, rules, and decision-making procedures that they embody – either through formal or informal processes. Such dynamics were seen as an important reflection of modern interdependence which creates a rationalist demand by states seeking to maximize gains through cooperation rather than by pursuing classic self-help strategies.2 Neoliberal theory places international institutions and their embodiment in international organizations at the core of state-driven efforts to create cooperation from international anarchy. Anarchy, or the absence of a government over governments, 2 See Robert O. Keohane and Joseph S. Nye, Power and Interdependence, 3rd edition (New York: Longman, 2001), p. 7. 4 creates a demand for predictability in international politics, manifested in various attempts at multilateral governance. States are seen as having more to gain from cooperation than pursuing self-help strategies. So long as the benefits of cooperation outpace the costs, states will sacrifice short-term interests for long-term mutual gains.3 The fact that states invest prestige and resources into international institutions is seen as important evidence of the demand for formalized multilateral cooperation. The theory does not, however, suggest that all institutions will matter at all times. Also, the theory does not suggest that institutions act independent of the distribution of power among states. Moreover, neoliberal scholarship does not intrinsically assume that states pursuing policy guided by liberal assumptions of international politics will necessarily pursue peaceful policies. As Robert Keohane writes, “neoliberal approaches can backfire as policy prescriptions.”4 The neoliberal approach to international institutions traditionally focused analytical attention on economic and environmental cooperation, where the dangers of defection from cooperation are low, rather than security cooperation, where the dangers of defection are high.5 However, core components of neoliberal theory have been increasingly seen as applicable to international security. International institutions, through established headquarters, staff, planning, rules, and procedures are thought to help states manage coordination and collaboration problems of collective action and make cooperation on security provision easier to achieve than in the absence of an 3 See Robert Powell, “Absolute and Relative Gains in International Relations Theory,” in David Baldwin ed., Neorealism and Neoliberalism: The Contemporary Debate (New York: Columbia University Press, 1993), p. 213. 4 Robert O. Keohane, Power and Governanc in a Partially Globalized World (New York: Routledge, 2002), p. 54. 5 See Lisa L. Martin and Beth A. Simmons, eds, International Institutions (Cambridge: MIT Press, 2001).

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